I'm not completely clear on what is lost of Google does have .dev for internal use
Domains are individual, TLDs are for classification.
If Google wants an internal dev domain, the answer is dev.google.com or google.com/dev or dev.google. Not to commandeer a global, generic TLD.
It doesn't reduce the functionality of the web, but it breaks the design intent, reduces the aesthetics, and corporatises it.